Equity indices in India traded on a firm note on Monday after most exit polls showed a BJP-led NDA getting a comfortable majority in the Lok Sabha elections.
The Sensex advanced over 1,079 points during the afternoon trade hitting an intra-day high of 39,010. Markets favour a stable government and until Sunday owing to uncertainty over the general elections, trading was marked by heavy volatility.
On Monday, the Indian VIX, or the volatility index, saw a sharp drop of over 18 per cent. The index came down to 22.9 from the 28-29 levels as investors cheered the polls.
'Post the exit polls we can expect Nifty to again test its recent high before May 23. Fresh breakout into the 12,000 to 12,500 zone would depend on whether BJP gets majority on its own,' said Mr. Rusmik Oza of Kotak Securities.
'If exit polls come true on May 23 then we can expect a structural up move in the mid and small cap space,' said Mr. Oza added.